Swiss food giant Nestle reported its best quarterly sales growth in nearly five years on Friday as consumers stockpiled everything from Purina pet food to Nescafe coffee to frozen meals to prepare for coronavirus lockdowns.
Sales in North America and Europe were particularly strong in March, helping to drive an overall rise of 4.3% in the first three months of the year, the fastest quarterly growth in nearly five years and above analyst expectations for a 3% increase.
In North America, Purina Pet care sales rose by a double-digit percentage while Nescafe and Coffee Mate drinks had high single-digit increases. Consumers also grabbed more DiGiorno and Hot Pockets frozen meals, giving some respite to the business that has struggled recently.
In Europe, Middle East and North Africa, most categories of Nestle product won market share, the company said. Maggi noodles and plant-based products from its Garden Gourmet brand did well, though water sales declined as fewer people ate out.
“A majority of markets, particularly in North America and Europe, saw significantly increased growth in March, partially supported by consumer stockpiling,” Nestle said in a statement.
Nestle shares were 1.4% higher in early trading on Friday, outperforming the Swiss blue-chip index.
Analysts at Jefferies said Nestle was outperforming rivals, trading at 24.8 times forward earnings compared with 20.9 times for Unilever and 14.5 times for Danone.
Unilever said on Thursday its underlying sales remained flat in the first quarter. Unilever has a bigger exposure to emerging markets where the coronavirus hit earlier, triggering stringent lockdowns that curbed consumer spending.
For Nestle, underlying sales in Asia fell 4.6% as customers in China stayed away from restaurants and shops for much of the quarter though online sales there jumped. The Swiss company also said prices had dropped in both North America and Europe.